USD, JPY and CHF were boosted by deleveraging as equity markets plunged. Negative influences on Tuesday fueled a flight to safety ahead of the ECB policy decision on Thursday and Friday's NFP data. There were concerns over a regime change in Egypt, which lifted oil to 14-month highs over $102 bbl today. In Portugal, the government was under pressure after ministerial resignations over austerity. Asia markets continued to worry over a China slowdown after non-manufacturing PMI data slowed to 53.9 in June from 54.3 in May. Eurozone data added to the weak picture as services PMI missed expectations, but retail sales rebounded. U.K. economic data continued to point to concrete signs of a recovery, which boosted GBP. AUD was smashed to 0.9053 lows as more dovish rhetoric from RBA Stevens raised expectations of an August rate cut.

[EUR, USD]EUR-USD cleared away 1.2950 barriers as the dollar bid steepened from the European open. Weak eurozone services PMI data forced a low of 1.2923. However, strong standing bids ahead of 1.2900 barriers, better than expected eurozone retail sales and a steadier stock market tone fueled a move back to 1.2970. Negative influences picked up on Tuesday amid rising risk of a military coup in Egypt, along with political uncertainty in Portugal and Greece bailout pressures. The benchmark Portugal stock index lost almost 6% early on and 10-year yields moved over 7% for the first time since December 2012. This had a knock on effect on other eurozone member states and may keep EUR under pressure into tomorrow's ECB policy decision. Banking stocks were also pressured by S&P downgrades for Credit Suisse, Deutsche and Barclays due to new regulatory rules for banks and market uncertainty. Sellers of EUR included hedge funds, along with light sovereign interest.

[USD, JPY]JPY rose sharply as risk aversion fueled unwinding of speculative positioning. A weak opening for European stocks and subsequent eurozone services sector PMI weakness exacerbated the move out of short yen positions. USD-JPY fell back from the 100.75 area and was forced into 100.00, where weak longs were stopped out. Heavy EUR-JPY selling was a significant influence on the dollar pairing. The cross plunged from 130.80 to 129.00 as eurozone risks rose, which fueled a USD-JPY low of 99.60. Option related buying kept the USD-JPY downside intact amid large 100.00 strikes and more dollar buying could also provide support now that weak positions were cleared out.

[GBP, USD]GBP surged on much stronger than expected U.K. services PMI, which hit 56.9 in June versus a 54.9 reading in May. GBP had started the session on a better footing as eurozone uncertainty fueled flight to quality trading, which leaned on EUR-GBP from 0.8575 to 0.8525. Cable edged up from 1.5130 after the London open through 1.5150 and then took off from 1.5160 to 1.5215 on the services PMI number, and then extended to 1.5260 on short covering by fund names. This follows another clean sweep of forward looking data that implies activity in the U.K. economy is picking up pace. The BoE's latest lending survey has also talked up the prospects for loans to business and households in Q3 due to the BoE's funding for lending scheme.

[USD, CHF]CHF was buoyed by safe haven activity. EUR-CHF fell from 1.2335 to 1.2295, while USD-CHF chopped between 0.9500 up through 0.9500 and back down to 0.9490 on dollar repositioning. Eurozone uncertainty, military tensions in Egypt and weak economic data in the eurozone and China fueled strong swissy demand. The dollar has backed up a bit as EUR found support at the lows from Asian sovereign, along with option related buying. However, ahead of tomorrow's ECB rate announcement and into the U.S. Independence Day holiday it looks likely that speculative positioning will remain low. EUR-CHF should see limited upside, but USD-CHF is still pointing to further gains, though offers are fairly sizeable from 0.9530 through 0.9550.

[USD, CAD]USD-CAD consolidated gains, leaving it around the 1.0550 region. On Tuesday it spiked to highs near 1.0575, levels last seen in October of 2011. Stop loss buying was a factor on the move over 1.0550, where noted offers at the level were reportedly pulled. Barrier options are seen at 1.0600, and will likely be defended, while talk of fund backed selling ahead the figure limited gains. Ahead of risk events this week, it was not surprising to see profit taking emerge over 1.0575. However, price action remained choppy. Risk aversion fueled a move up to the 1.0560 region by early Europe, but a quick reversal was noted into the 1.0520 area as sentiment stabilized.